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8 Ways to Keep Your Employees Happy

A recent survey found that 70% of people are more likely to look for a new job after vacation. Realistically speaking, with the holidays and the accompanying vacation days just around the corner, there's a chance a few of your employees are looking to jump ship. And that's bad news for two reasons. First, if they're unhappy, that could reflect poorly on the company culture, morale and/or management. Second, it costs 20% of an annual salary to replace a mid-level employee, and it could cost 213% of a year's salary to replace a C-suiter, according to a study by CAP [PDF].

Odds are, you lack the time, money and patience to recruit a new slew of hires, so we've done you a favor and rounded up tips and tactics for building employee retention and fostering a happy workplace that makes people want to stick with you.

"We don’t say we have a great culture because we have a keg, or do fun events as a company," says Alexis Lamster, director of people and culture at Carrot Creative, which has a maximum turnover rate of 3% in an industry that averages 30%. "Culture is about the shared values of a group of people ... By supporting our culture in hiring and in the brands we choose to work with, our employees have a stronger sense of loyalty and, in return, are more invested in their jobs."

Read on for eight essential tips for employee retention for your small business. You'll notice that there tends to be some overlap between several of these tactics; that's because cultivating a strong company culture is complex, and it requires a holistic approach and a lot of dedication. But it's worth it — just ask your employees.

1. Have a Mission

Millennials, in particular, want to feel like their work is making a difference — they don't want to be just another cog in the machine. They're drawn to innovative young companies helmed by social entrepreneurs — think TOMS, Pencils of Promise and Warby Parker — that are simultaneously cool and impactful.

"Have a purpose that’s bigger than your company," says Moon Kim, VP at M Booth, adding that your company should "make a difference in the world." But even if your business isn't built around an altruistic mission, you can bake social good into your business plan — you just need to be "mindful of others and seek to do good whenever possible," says Kim. Method brings water to impoverished areas, Chalkfly invests profits in teachers, Privy helps small businesses master web marketing and Greatist helps people be healthier. You don't need to be Mother Teresa, but you should show you care about other people and your community, not just your profits.

2. Give Employees Ownership

Has anyone ever enjoyed being micromanaged? People work best — and are happiest — when they have ownership, when they can solve problems their way and express their individuality. (By "ownership," we don't necessarily mean equity.)

"Benefits and perks are important, but from our perspective, it's all about empowering employees," says Zohar Dayan, CEO of Wibbitz. Especially in a small business, every person counts, and everyone's contribution should be both obvious and valued. "Whether it be an open-door policy on ways to improve everything from marketing to the product to the office atmosphere, or regular team brainstorms, when your employees feel that they can tangibly impact the direction of the company, they're more likely to throw themselves fully behind the cause."

ZenPayroll CEO Josh Reeves recently wrote a blog post about building a team of owners and the importance of letting employees know their work and opinions are heard and valued. Employees should have a stake in the company — they're not just working for The Man. "The #1 way we boost morale is by empowering people to do their best work and letting everyone act as owners, not just employees," says Reeves. "That can mean any number of things, from sharing extremely detailed information about the company's finances and future plans, to letting people choose paint colors and decorations for our new office."

At Hire Space in London, teammates design their own workspace — a decision based on a study that found employees who had control over the layout of their workspace were 32% more productive. Whether they want a stand-up desk, some plants or a stability ball, these employees feel more comfortable (physically and mentally) and efficient in their space. "It's a really simple change, and we've seen a real effect on our staff's ownership of their workplace and a measurable improvement on productivity," says Reuben Sagar, marketing manager at Hire Space.

It's also essential that the person have a path of growth within your company and gain increasing ownership. "When hiring, we actively think about what new employees' careers will look like with us — not just what they'll do day to day, but how they'll fit into our structure, and whether we can create management or leadership opportunities for them in the future," says Kathryn Minshew, co-founder and CEO of The Muse. Periodically, the team then revisits those conversations to determine how the teammates can evolve, take on more responsibility and own more projects. "Helping employees grow within your company lets them know you're committed for the long haul," says Minshew.

3. Get People Talking to Each Other

It's easy to fall into a silo and only talk to and work with people within your own department. If your company is growing quickly or has several offices or remote workers, some employees might not even recognize each other — but it's essential that they know and engage with one another. Whether you're using Skype, HipChat, Campfire, Slack or Honey, encouraging teammates to interact will make employees feel more connected to and informed about their company and one another. In fact, Honey was born out of necessity — it was built to meet parent company Huge's internal communications needs and saw great success, so it spun it off into a separate company in June and is now used by ShopKeep, EMyth, Lyft and Fueled.

Even a weekly videoconference can go a long way. Sure, it might temporarily dampen productivity to have the whole team in one big meeting, but on the upside, they get a chance to see what other departments are working on and how everyone's contributing to the overall mission (which also feeds the sense of ownership).

Formstack has company-wide video-conferences weekly and recently did an all-hands conference in Indianapolis for a week of face-to-face team-building and planning. "It was a great way to spend time with our remote employees and make sure everyone is working toward a common vision," says Chris Byers, Formstack's CEO. Two heads are better than one, especially when they have different backgrounds — your data scientist might have an interesting idea for the marketing team, and your business development team might suggest something cool for the tech team, so you should foster cross-departmental conversations, both IRL and online.

4. Provide (and Ask for) Regular Feedback

People dread yearly reviews because it's often the only time they get feedback — and what if they've been unknowingly doing something wrong in the 364 days since last year's review? Reviews are the exact opposite of ripping a Band-Aid off — a little tug here and there actually saves pain (and frustration!) in the long run.

And don't forget that feedback is a two-way street. Fred Bateman, founder and CEO of Bateman Group is proud of his company's 5% or less turnover over the past 10 years, and he attributes this retention rate to his company's "10 Rules for Maintaining Low Employee Turnover." One of the standout ones is to make sure everyone understands they have a voice, regardless of title, and that their voice is heard loud and clear by senior management at all times.

"I think a leader's willingness to have difficult conversations is the single-most underrated management skill out there — but only those conversations will give you a true read on your employees' morale," says Allyson Downey, co-founder and CEO of weeSpring. "It starts with an environment that encourages everyone to speak up, but also requires pushing for truly candid feedback on your own performance ... and then accepting it!"

One way to build trust and enable these honest conversations is to make a commitment to transparency — it'll open the lines of communication. At HubSpot, every employee at every level has access to every board deck, and can ask questions of the founders and management team at monthly SpotLight meetings, says HubSpot's Katie Burke.

5. Have a Culture Committee

It's hard to make sure your employees are engaged and having fun, so you should task a team to own "people operations" and culture. "We aim to make Carrot a home more than an office and a family more than a staff, with welcome drinks for new employees, large gatherings (i.e. Thanksgiving potluck dinner), a softball team, committees and subsidized perks," says Lamster, who adds that Carrot's committees aren't your typical corporate groups. "We fund people’s passions to help make the company better," she says. Bitches Be Bakin’ makes delicious treats to celebrate everyone's carrotversary, the Brew Crew Committee ensures the keg is always full, and the Carrot Cares Committee finds opportunities for the company to give back to the community. "These committees create a ground-up way for every person at Carrot to contribute to and be a part of making this the place they want to be."

Similarly, the spirit committee at M Booth encourages bonding across the agency and helps to make office life fun, whether it’s a wheel of fortune at staff meetings (previous prize: a Zombie Makeup 101 class) or a group outing to a Nets Game. "Our spirit committee keeps people happy because it shows that we want to foster community, we value each employee and are thinking about them," says Lauren Martiello, creative strategist and chair of the spirit committee.

Cashmere Agency in L.A. has a five-person culture club but also encourages the whole team to step up. "We have a very diverse range of employees with different backgrounds, so we create activities (inside and outside the office) that allow everyone to learn and understand the cultures their colleagues come from," says agency VP Ryan Ford. This includes an annual cook-off that requires ethnic dishes, as well as field trips to cultural events around L.A.

6. Encourage The Team to Live the Brand

Your employees need to be passionate about the brand and your mission; thusly, your job is to encourage them to live the brand. This creates twofold results: It reminds them why they work for your company, and it ignites passions that can be shared with your customers.

"People are our most valuable asset, and the more we take care of them, the more they will take care of our guests," says Jonathan Neman, co-founder and CEO of sweetgreen, a lifestyle brand that purveys salads and rallies around a healthy, passionate living and sustainability. "We want to build a company that creates unusual combinations that inspire, a company full of employees that truly live the sweetlife." The employees have access to free salads, a concert and speaker series, community service opportunities, a running club, free fitness classes and a gym subsidy to help them embody the brand.

Likewise, Fancred, a social network geared toward sports fans, offers employees $200 per month for two tickets to any sporting event. "It reinforces our mission and sends a loud message that things are different here and we really believe in what we are doing," says Fancred CEO Kash Razzaghi.

At Plated, each teammate gets four plates per week — yes, it's free food, but it also helps the team become familiar with the service's offerings and recipes, so they can make knowledgeable recommendations and provide the operations team with direct feedback. They're always immersed in Plated and become even stronger brand ambassadors because of it.

7. Place a Premium on Employee Health

It's not healthy to work like a dog. The companies with superior retention rates are the ones that recognize that wellness is essential to productivity. Messaging platform imo offers a housing stipend for employees who live within walking or biking distance of work, has treadmill desks to keep the team active and subsidizes a free membership to Equinox.

“We have created an atmosphere focused on wellness within the workplace," says CEO Ralph Harik. "Finding time outside of work to exercise is often tough, and we've found that these benefits have helped increase productivity and boost company morale."

Wellness isn't just physical, it's mental, too. If you notice someone starting to burn out, nip it in the bud. Minshew recommends setting a cut-off time, when the person should turn off their computer and cellphone, in addition to encouraging vacation days and taking a lunch hour. "They're all small things, but they can help prevent burnout in the long run," says Minshew.

8. Recognize That Perks Are Nice, But They're Not the Ticket to Retention

Yes, perks make people happy. You can't beat free lunch, free health insurance, unlimited vacation days or flexible hours. But people mistake culture with perks.

"People think culture translates to parties, vacation, and non-business-y policies. I disagree — culture is the personality of the business, and you have to mean it and stick to it inside and outside of the company," says Brandon Kessler, founder and CEO of ChallengePost. He says that there's not one magic formula for culture; in fact, he cites three examples of different cultures. Companies with a cutthroat culture (Wall Street), an open, transparent, and highly productive culture (many startups), and a highly secretive culture (Apple) have all managed to find success. "Studies show successful companies that actually have a culture and stick to it are the ones who win. If you are starting a company, you should be as focused on the culture you want to have as you are on your product. It's much easier and more authentic to define it at the beginning than later on."

At the end of the day, you need to value your employees and, importantly, let them know they're valued. If you're looking for more insights, check out Tony Hsieh's Delivering Happiness as well as HubSpot founder Dharmesh Shah's SlideShare about company culture, which has amassed more than 1 million views to date:

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